tv Fast Money Halftime Report CNBC August 26, 2016 12:00pm-1:01pm EDT
one if not the only companies reporting today. >> and doing well after earnings. a beat in raise there, but splunk not doing well. despite a beaten raise because billings didn't come in with investors wanted. >> high expectations. a good weekend to everybody. over to headquarters and "the half." welcome to the "halftime report." i'm melissa lee in for scott wapner. top at this hour, long live long longer. janet yellen hawkish, kind of, sort of. she hedged again with that same line we've come to expect. the fed is data dependent. is it lower for longer? today's traders josh brown, jim lebenthal, jon najarian and
courtney gibson's what did you make of the fed's comments and reaction right afterwards? >> she said what she had to say. end of the day you have to give a little bit of value. she has seen amazing data. i think they want consistent data that's positive. right? it's been somewhat up and down, trending in the right direction. but she does have to say be consistent around that team. >> does your expectation for a fed rate hike change today? >> no. >> expecting what? >> to hike this year. i've said that the past year and definitely in december. september happens, i think it surprises folks. >> same old same old for janet yellen? >> answer two different questions. one you haven't asked. i think she should raise. will she? no, i don't think so. >> it doesn't matter what you think. >> i wanted to put it out there. it's a lovely friday in the suburbs. thank you. one thing that could wiggle this one way or the other, the jobs report next week.
i do think that that could tilt things, if you have a particularly strong report following on the heels of the last one, to tilt in the favor of september. clearly the market does not think, does not think, she's going in september. >> i thought she did, as courtney said what she had to do. they lose credibility every time they trot out fischer or even bullard and some of the other folks that have gone out and said, yep. hawkish comments. going to, you know, not just data dependent but seeing signs we can make this interest rate hike. if she didn't, came out with a dovish statement, they would have basically lost credibility. granted -- >> irony in that, because the markets are basically saying, we don't believe you anyway. so it doesn't matter what she says. the market is -- >> going to do it in september. at least not in the last several months. >> right. >> i don't believe, despite what jim says, i don't believe that
any amount of a positive jobs report next week can get them to move in september. i just don't think that's in the cards at all. i think december, and it will be a one and done for another year. based on what the rest of the world's doing. that's where i am. >> does it matter for your portfolio at this moment in time? through the end of the year, raise in september or december? better in december or september? >> does it matter will it have an impact? probably will if they raise or don't raise. difficult to foresee the impact so we don't play the game. a slightly different take whether or not the market believes her. my take, the market doesn't think she has control over the bigger forces that are impacting rates which are things like disinflationary pressures coming from europe and japan. demographics. secular change revolving around technology and productivity. overnight fed funds rate doesn't change any of those dynamics and those are actually the things
that matter. the market probably, if you want to anthrommorize the -- >> big word for friday. >> i apologize. >> we can take it. >> okay. saw a spike in the quote/unquote stock market and saw the iyr, real estate and vmq, sector ef f, and vanguard only with a 1% gain on the week. saw utilities spike. those were the areas that you would tend to think would sell off on hawkish talk, and they ripped. that's telling you that the market doesn't believe yellen really controls the global rate situation. >> but pe they made those 1% moves, and jason and i talked about this before ms. yellin's speech, like josh is saying. looked at the excel, gld tlt.
shehawg hawkish. she did. they moved and basically negative. up 1% across the board, these three, and now gone back to where they were before. >> bottom line to that is -- >> bottom line to that is -- >> same as we were before she started talking today? >> yes. >> nothing changed? but the market doesn't believe anything's going to happen until at least december or 2017. >> by the way, in a range in the s&p. 2147 by 2193 for the last 32 sessions. that's basically the middle of july, and you have to go back to early june to find a week where the s&p lost more than 1%. we're in a stasis here. and today's remarks really didn't change that dynamic at all. >> bring in paul crepe, founder of investment research view from the peak thinking now is the time to reposition your port follow your before a fed-induced correction.
paul, good to see you. >> good to be here. >> almost like people want to see a rate hike actually happen before they will actually believe it's coming down the pike. >> doesn't matter, because jon made the point articulately. they're going to raise once this year. will wait. and we could have a situation over a three-year period we have 25 basis points per year for three years. that is an environment which means that risk curves around the world, rally and rally. we need to be, in a lot of ways, re-assess the ways we look at risk. bond proxy sectors that have continued to rally and a great anecdote, talking to a hedge fund operator, mother has the best shop of anyone he's seen. buys and holds. buys high yields. dividend stock, buys yielding assets. when do we have to start looking at bond proxy sectors and start valuing market bonds?
as riskers flatten, the fed effectively is going to keep rates below 1%, probably for at least the next 12 months. how do you not have money continuing to move into other yielding assets? >> okay. like what? >> across the curb. everything tr sovereign bonds to commercial real estate. key point, just no sellers. hear a lot about cash on the sidelines and money moving -- >> wrote seller strike. >> we have a global seller strike. central banks that will not sell sovereign bond and investment grade bond portfolios. private banks, family offices, not going to sell yielding assets, because the hurdle of being negative and going to safe haven asset is so much higher than in years. >> and the other dynamics. buying corporate bonds, easy bee. central banks buying equities and a lot of money flowing into low volatility funds. the only play. that is what's getting the most money, and it's sort of like this virtuous cycle here.
money keeps going into this low -- >> that's my point. so what's the convenient, melissa's talking about the virtuous cycle. not forever. we all agree. however, we can agree timing we're pinpointing when that cycle ends is probably crushing people now, as it's been for two, three years. what's the event, in your mind, all of a sudden throws the only monkey wrench that matters into it, where that cycle starts to work against itself? >> inflation. inflation is the only thing that matters. inflation, end of the day, what we've done -- >> ironic. that's what everyone's rooting for. >> correct. that's the house of cards. right? because at the end of the day, the only consequence of printing money at a record level is inflation. if you don't get inflation, there are no consequences. right? you can -- sorry. >> just on the flip side of that, and i know you're talking about inflation. on the flip side. say the economy actually stalls here in the u.s. and at 1.1%?
1.2%? just got the read on q2 today. on the back of q1, not much better. do you worry the fed is out of tools here? one rate cut and back to quantitative easing, a bunch of political peril to it. i do worry about this, paul. i worry they don't have the tools to combat a recession and we're close to stall speed. >> again, a lot more tools available to them than the acb bank of england and vij do for start. mark crowe g macro guys like me like talking about this. now, u.s. bonds would not be trading at 1.5%. the dollar would not be where it is. we can talk about lost credibility all we like, but are not there yet, and do have an environment where the fed is trying to micromanage cycles. one could argue doing a reasonable job at that. is that a sustainable environment? no. tell me when inflation occurs.
that's when it kks unsustainable. >> part of the other problem, it's a huge elephant in the room, as folks continue to seek yield and go into some of these other sovereigns. you're obviously running a global firm, as am i. a situation where you see investors hunting for yield and lending money at rates -- not even talking about negative interest rates. basically paying us to take your money -- talking about pakistan, sovereigns issues debt. the other potential bubble, hate to go down that path, the issue around potentially defaults. you have italy, countries actually issuing debt at level igs know i wouldn't lend my money. because firms and particular institutional investors, large pension plans, need to reach actuary over turn assumptions are going into asset classes historically they wouldn't have especially the levels they're going gow.
>>-of-now. >> legitimate, but acb. they are, have underwritten the europe poon bond market. just as the bank of japan is trying to underwrite japanese equities, buying rates, et cetera. there's a level of security think. back to the very basic point. that for this to unravel you even need to have inflation or you need to believe that leverage on central bank balance sheets will cause a structural issue. now, my big point in all of this is, the fed is nerve every going to sell its bonds. worried about 25 basis points. watch what happens if the fed announces stop selling $4 trillion worth of assets. >> a temper tantrum, rehearsal. they're not going to do it again. >> boj going to sell jgbs? not happening. bunds sell italians bonds? not going to happen. because they can't. sellers' strike, because the asset with the -- >> basically -- bottom line, i
need a bottom line. got to go. that, sounds like you're saying we're relatively safe to stay in the markets at this point? >> yes, we are. >> until we're not. >> then ends badly. for now, inflation's not around the corner. right? at these, these things that precipitate that protection you're saying could happen just aren't there we're going to an asset. asset bubbles across the spectrum that produce. asset bubbles are only a problem if you're not out in time. >> right. >> between now and the end, they're awesome. >> few words, but -- >> thank you so much. good to see you. one of the biggest hedge fund fights is back on. the battleground is herbalife, that started here on this show in january of 2013. >> i never said i want to be friends with you, bill. you would like to be friends so we can invest again. >> carl, no interest. you think i want to invest with you? move on -- >> invest with you -- >> move on.
>> if you were the last man on earth i wouldn't invest with you. >> wow. a tame clip. and mending fences. cnbc, a nice, big bear hug. >> no, no. >> fight's back on today. live in new york, kate? >> melissa what a fight this has been and the war of investments, if not of words continued on our air. bill ackman calling in to "squawk box" explaining why on earth a noted short seller he considered buying herbalife shares from carl icahn. began with a "wall street journal" story reporting that the investment bank jeffrey tried to sell car icahn a 17 million stake in meshal life making him top holder in a consortium of investors and bill ackman considered being part of that. called ackman asking whether it was true, and also why. he had this to say. >> they came to me said, if you have interest in overing your position? absolutely not. sort of laughed about it.
then said, well, obviously we can get carl out, that will help you. >> true. went shopping for -- went looking for potential buyers and my thinking was, one, no obligation obviously to hold the shares. the trade done at 4:15 wednesday. thursday morning, sell my entire stake a new position. >> ultimately ackman estimated he might have lost $30 million flipping that stock. a price willing to pay to get carl icahn out. icahn, ackman said, knows the company is toast. ackman's words. after a federal trade commission settlement july 15th requiring changes to the company's business practices. ackman's view is that the earnings will erode once the changes are made. meanwhile, billion dollar short position trading at a multiyear loss. shares down about 16% since ackman went short sometime in may 2012. sorry, up 16%. short seller, that's bad.
icahn almost doubled money. shares up 75% since he got in having bought late in december of 2012. ackman kindly gave icahn credit for that melissa. at least in terms of investing together, he's saying carl's done a good job here and in other places. >> kate kelly, thank you. scott wapner, of course, host of the "halftime" show on vacation but clearly working the phones. hi, scott. >> how you doing? >> great. what have you found? talking to bill xir istiritz? >> and icahn, not talking about rumors and stories about what he's doing in all of this. so he awoke like we all did, read the "wall street journal" story and then reacting at such. i did speak with bill stiritz as well, one of the largest individual shareholders as well and speculation what all of the bigger holders have been doing, whether it's fidelity cutting its stake. now this report about what mr. icahn is allegedly trying to do and what bill stiritz would do. he tells me had still has
herbalife shares, a lot of confidence in the company. that he still believes in its business model. that he thinks herbalife's impact on society is positive, and that he has a lot of confidence in carl icahn as well. so i think people are trying to get their score cards out today and find out where all of the biggest holders are in lieu of this latest report. >> and should be noted that just because carl icahn is looking to exit his stake, it doesn't necessarily mean that the stock won't continue to go higher. we've seen carl exit positions before. pretty big gains, in lionsgate and slcelestial, still more upse to come. >> this is such a unique story in and of itself, melissa. it's hard to, i guess, read into the big picture where herbalife shares are going to go in the future, just by she chew virtue
don't know what the long-term impact will be. if icahn was getting out, a negative on the stock? of course. he has, as you guys said, 17 million shares. so just by virtue of that load being put on the market, the stock would certainly go down. it would also be probably viewed as a, know, a confidence blow if someone like carl icahn was to get out. it probably wouldn't bode well for shares. i heard somebody want to ask you a question. >> scott, it's josh. we miss you. but mel's pretty good, too. >> you guys better be treating her well is all i'm saying. >> of course. i just wanted to mention, and jon could give you more detail on this, but in the "wall street journal," there wasn't really much mentioned about options activity, but we know icahn uses options and we know a lot of other sophisticated players do as well. maybe not to unload positions but to at least hedge. jon's pointing out some activity that maybe is worth bringing
into the discussion. >> yeah. and as you know, scott, and mel, with mr. icahn, he doesn't trade listed options. the sort of stuff i talk about on heat seeker and so forth is probably created by the people that offer him that liquidity. whether it's a trading desk at jeffries or goldman sachs or wherever he is. going through to find that liquidity -- over the counteroption, those people that provide that liquidity are hedging down to about the 45 strike in february. so that's a decent little sell-off from where it is right now to your point, scott. >> the other interesting thing, guys, to consider is that, you know, let's not forget, carl icahn is not only one of the, the largest individual sharehold shareholder, but a handful of board seats as well. so just complicates the whole issue of an exit. not only have to get somebody to take the other side, if you will, of carl, which may not be easy to do, and you know, bill ackman told kate kel around the
folks on "squawk box" this morning he would have been willing to do that a little bit at a loss just to get carl out. why would big ackman want carl out? obviously what i said earlier. he knows carl icahn's getting out would be a negative on the stock, but i guess the point i'm trying to make is that it's just more difficult for someone like carl icahn, the size of investor he is and also the fact he has a handful of board seats, to make an exit. but by virtue of the fact after the settlement happened with the ftc, volume in herbalife shares had spiked to a level that would have at least opened a window to an insider to be able to make that kind of move, if one wanted to do so. so, you know, ob obviously, there are various rules at play that limits insider to sell when they can by virtue of the knowledge they have of what's happening in the business, but in that period right after the settlement with the ftc, volume in herbalife shares had spiked
toe dramatically compared to their average daily or weekly v volume it would have opened up a window, given icahn, the way i understand it, from a rules standpoint to make that kind of a move. an interesting anecdote to add to the whole weight that this story is being thought of today. >> all right. scott, let you go and enxwli is left of your vacation. these guy, a handful. this seat will be waiting for you when you get back for sure. >> you guys have a good weekend. see you on the other side of the weekend. >> our own scott wapner calling in for us. a quick comment here? >> i would be really skeptical of all of this wonderful soap opera drama we got today. there is two sides to all of this, what does the effect of this information coming out have and what it is having on the stock and who ben kniefits. jeffries and carl is not
commenting. could be reasons. moving around this, not a lot going on with the fed today. so this is getting a lot of headlines. i would be very, very cautious as to whether or not any of the story is real and, b., you know, that says something about potentially what happens. i mean, i run traders, end of the day shopping flow you know who to go to and not, unless you want to lose a client. unless everyone's in cahoots, a lot of potential if it occurs end of august. >> and sitting down with a conference produced by an inen stushl invest september 13th in new york city. carl is one of the many big named investors at the conference. more details check out deliveringalp deliveringalpha.com. we are just getted started on the "halftime report" dmns is the alpha stock overdone? some see opportunity. will these stocks get healthy?
wall street also weighing in on a few retailers are the call as day late and a dollar short? plus a big call on alibaba and big success on twilio. the stock showing big returns. up 250% since ipo day. those names and more, next up on "halftime." that a great idea, but whdon't you ju go to thinkorswis chat rooms where can share strategies, idean actual tras th market professionals and t? thinkorswis chat rooms i know. brain told my brain befo you told myac mmm,lueberry? tainto the knowledf r trers on. on ametrade. mmm,lueberry? there's lot of tree branchan dry brush ohere wshrobaly ve t bonfire over there
raising price targets to $130. mpm saying ali bab bah will be "the best performing large cap in the internet sector over the next 12 months." our call of the day. specifically talking about the chinese cloud total addressable market massive in the next four years or so. also talking about ant financial, ipo in the first half of next year which could benefit shareholders. >> i like it. yesterday, mel, i bought it, alibaba, but don't think it's the internet play the next year or several years. netflix is that. another stock i bought and i like netflix better. put them head to head and would rather have netflix. why the comparison with netflix? curious. >> if you're saying the best internet stock. >> just internet overall. >> not discs delivered to our doors, netflix. we all know. internet play along with hulu and amazon and i think they're going to do the best of those three, and even throw alibaba
into it. outperforms. >> so i think alibaba is set up. seems like everything that they're pursuing now looks like a chinese version of amazon which is a complement. so hits cloud, for example. i really think -- longed the stock. done okay with it. not genuinely to play the chinese sector, be broader. talked kweb over the years a better way to play. you look at for example what ten cent is doing, you have to be in names like that. you can't just own one. c trip. a handful of names with great thing going on. the single stock risk with any chinese is elevated. prefer to be if ky gets above $40, not resistance, could take off because of this ali bbaba cl being right.
>> and courtney, decision to buy netflix. essentially saying that, you think, is the best internet value now? >> not the only internet name i'm buying. content of netflix, see the shows, unique content. right? funny. remember the rumors that potentially bottle buying netflix. i actually like them. people may totally disagree. amazon may look at netflix rather creating, doing the amazon trend, go after the fact netflix carved out a niche. amazon -- >> own streaming. original content. >> not like netflix. you go in, dominate the market. amazon is trying to compete with the xs and os of the world. not well. i love amazon, by the way. a huge customer as well. end of the day a netflix amazon play could be interesting. >> amazon would be the one buyer who would actually look at their own currency and say we get a bargain buying netflix. anyone else, buying netflix, saying about the earnings
multiple. not with amazon. >> move on to another stock seems to be working. twilio shares rallying 100% since going public. courtney bought them and recently more. recently a first earnings report as a publicly traded companies a couple weeks a. >> knocking the kovlerkovler -- off the ball. talk about plays on non-public companies, uber, ddps. guess what? cloud play, twilio. the messaging supplier to uber. whatsapp? right, facebook monetizing it, who's the power behind whatsapp? twilio. plenty of whom to grow. not overvalued. >> and after labor day supposedly going to be more tech ipos in the market. >> fine. >> doesn't matter? >> no. may come out of other names pep folks thinking not much growth left. twilio is a name that is to be
reckoned with in the space. >> all right. trader blitz. first up gamestop under pressure, quarterly sales fete short of estimates. jon? >> yeah, well, luckily, mel, one of the mines i've avoided lately, but loved in the past. loved getting into this stock. especially just ahead of earnings, but certainly happy i wasn't in it this time. there was not a sniff of positive action going into the quarter. so -- luckily -- >> and jeffries behind benefit manager firm scripts, the related sell-off is over done. >> completely agree. the ceo of mylan yesterday threw them under the bus. a decoy of getting the attention off of her and her company with regards to the epipen. these companies have done, pharmacy benefit managers, that, have done a good job keeping prices low and frankly at their valuations now, around nine times earnings, a good buy.
>> and quarterly results? j.b.? >> not for me. i really believe that. this is a rapidly commoditized business getting worse all the time. big, big, deep pox the player in the space. this is going to be really, really tough for shareholders. could be wrong. something i'd rather avoid than try to get right on the upside. >> starbucks seeing another day of gains. up more than 5% on the week. courtney? >> opposite. yes, yes, yes, on starbucks. you like the emerging markets play. obviously, the ceo going big into emerging markets. particularly china. starbucks grows behind incredibly strong leadership. >> just after, what, 12: 30 on wall street. s&p circuits nine of ten in the red. health care only one eking out a small gain, 0.1 of 10%. a tough week for health care
falling 2%. bonds, etf track bonds, tlt frayeding n i trading negative. sue herera with the headlines. what's happening at this hour, everyone. the italian government declaring saturday a national day of mourning in remembrance of the central italy earthquake victim. the death toll, 267. italian prime ministermateo -- matteo renzi will attend a funeral where 49 died in state. and meeting in geneva, switzerland. john kerry urging russia to strike a deal with the u.s. on fighting islamist militants in syria. something that hasn't happened since 1961. cuba announcing it's ready to receive regular commercial flights from the u.s. beginning next week. jetblue will begin direct flights from for the lauderdale to central cuba wednesday. officials from the world health organization say so far there are no confirmed cases of the zika virus contracted by
anyone associated with the rio olympics. since the virus does have a one-week incubation period, it is possible a few cases may still occur. so far, so good. that's the new update this hour. back to you. >> thank you. the athleisure trade, lulu soaring this year. nike falling behind. talking about those stocks and much more when "halftime" continues in two. romantic moman happen spoaneous, so w pause to take a pill?
or stop toind a baroom? cialis f dse, s ofph, like needing too frequently, ll youdoctor about all yoedical conditis. and medicines, and ask if ur heart is hlt enough fosex. ll youdoctor about all ydo adeas forialis if youke nr, puonarhypertension, as it may cause an unsafedrop i. do not drink aol in exss. side effec may inc headache, upset stomach, to avoid long-term injury, t medihelp rig away delayed acher le ache.ss. for an ection lastingrehan . you he ansudden decreaseor los, any symptoms of an allergic retion, st tg cialnd get medical lp right away. ask many men an't awtheir heal . any symptoms of an allergic retion, cialis for daily use. acyourealth pl fothst imation.
. a big week ahead, home data, auto sales, august jobs report and key earnings including palo alto saless for, box, broadcom and lulu lemmon. focus on lulu. stock rallied 50% this year. courtney? >> yes. >> you are in it? >> i was. >> sold it. >> i did. >> sad. >> i'm sad, however, you can never be sad when you actually make money. >> true. >> lose money, i'll be sad about it. bought it much lower than i sold it and still a quality company. quality, quality company. >> pete's been all over this one and luckily for me had our clients in it. i don't have a stake in it now, mel, but i do love the performance of the company, and i think courtney and anybody who wants to take some profits, want
to trade through 80 for a little correction is a smart move. >> another stock in the space. nike downgraded to a neutral today. analysts saying valuation high. 5% of its own price target. offset improvement in basketball. jim, want to get in on nike here? >> top of of list to own now. at the top. frankly, after the last herbings report are two months ago, stock traded to 50. my mistake. supposed to buy there. i didn't. i think this analyst call is far more about valuation than anything wrong with the company. the company seems to be going really strongly. at the end of september, should get their next earnings report. sometimes volatility in their futures orders and that's what really moves the stock. maybe i'll get lucky in late september. have a collapse. not a collapse. at least a price decline. like to get it in the low 50s. >> valuation top reason in the note. within the note, talk sentiment on nike reaching a -- >> terrible. >> no. very good lately.
>> terrible! >> we've had good. good commentary from foot locker, finish line, talking about strength in basketball. everybody is hopped up over how basketball won't be as bad as expected and now worried about running. that's the new problem. >> seeing something totally different. first off, olympics. talking adidas, and that killing nike. talked a lot about lulu. this is a sousolid year i see i of negative comments by analysts. the stock has gone nowhere as the s&p appreciated nicely. see a lot of negative sentiment. >> i agree and disagree same time. negative sentiment with the markets and with analysts. i have a 6-year-old nephew who knew the word nike at 4 years old. that brand is unbelievable. >> absolutely true. >> back-to-school shopping. what are you going in? buying everything nike. look at the shelves. flooded. >> why i want>> it how are we
saying negative sentiment on a stock that trades 27 times, 12 months, joking? >> not. >> analysts saying -- >> stock peaked around christmas. been in an eight-month down trend. i agree with jim. look for volatility around an earnings report, doesn't give everyone what they want. stock overreacts down side, maybe a better position. no-man's-land flailing nothing dragging me to want to be in it at this moment. absolutely not negative sentiment. trading at an order of magnitude above its peers and over allmarket. >> the past month up 4% compared to the broader market. sentiment has turned, pointing out, yeah. >> long term. more down grades for dollar general. a day late and a dollar short? first the s&p sectors check. look at that. all of them i mentioned before, in the red except for health care eking out a small gain now. more "halftime" straight ahead.
do? bill gross weighs in. and the supply chain. pbm under fire. show you exactly how the system works. does big pharma need its own version of dodd frank regulation? we'll see. and josh brown make as move in "halftime" for the follportf. seen down grades in two days. >> say i'm selling. say i'm running. what i'm doing is, i'm trying to buy names with momentum. this is definitely the opposite of momentum. can't hold it and doing rules based. not worried about what earnings were, whatever. suffice to say this is a fairly challenged group of stocks these days. people are worried about walmart getting aggressive on pricing and it all came to a head on the earnings call. noor reas to that reason, a sell.
>> not familiar with the exact rules for the challenge. how long do you have to buy another stock? looking? do you have a list? just going to hang out there and -- cash? >> almost do whatever we want in this particular challenge. we have unlimited trades. >> what would you do now, then? >> well, i have a portion of my portfolio in cash. not bad to have a little optionality, i guess. but i am looking for new setups, want to own stocks that are breaking out, and acting well. high relative strength and a good trend. this is not one of them. so -- >> all right. >> c'est la vie. >> more on the "halftime report," logon to the website. and dr. j's trade is next. announcer: "halftime report" with scott wapner is "the" place for market-moving interviews. >> you don't call a company a sewer because the company made a mistake. >> announcer: real money -- >> we are short both tesla and solar city. >> announcer: -- real debates. >> people think that globalization has hurt businesses. it's not. it is technology that's hurt businesses.
>> competition is a good thing. i don't want to go back to a single marketplace. >> announcer: the most profitable hour of the trading day. >> i love this show! all i do is get to tweet about this show! i'm on the show. this is the greatest moment of my life! >> announcer: the "halftime report." weekdays at noon eastern.
we've just bn hearing much about ho you're a digitalompany, here yououre buildin a jet engi. , ge is digital you're aand instrial.y, here yououre buildin a jet engi. like peanut tterndelly. yeah. ham chee. yeah. copsnd ryeah.s. os and karate. not that one so mh. threst were real good. socks and shoes. rick
cde. stock bottomed about $12.50 just over a month ago. made a run from there up into the $16 range, and i think it's setting up to do exactly that again. you can see today up about 4%. here's the move from basically 12.50 yesterday, moving up here now to $13.88, and we see activity, mel, in several different strikes. the 13 strikes, the 14, the 15-strike calm, all out in september, just one month out. so we think that people are betting on the stock moving, like i say, back to 16. so depending which one of those strikes you pick, you get an awful lot of leverage, and you get a lot of up side very quickly in a stock that can move 4% in a single day. like you see right now, up about 4.5%, as we stand. i bought it. probably be in two weeks, mel. >> jon. >> yes, sir? >> stay gold, pony boy. [ laughter ] >> stay gold? >> all very proud of you. >> oh, thank you.
>> i was going to ask a serious question. i'll let that go. >> good idea, mel. >> thank you, jon. financial and health care stocks, weakest wormen esweakes. desk looking for opportunities. that's next. ev technology me engines more effic wh company does althis? weworkg on a theseat's who. thgs to make cars bett and usless f helpg you save money and du emiions and you thought we just made a energy lives h he. and you thought we just made a narrat: the st place come on, ts wa.. bo:
your business needs better technology to drive better performance. so you need it to be reliable and fast. really fast. introducing the comcast business summer savings event. fast internet speed to drive performance, plus cutting edge wifi for your employees and customers, and voice mobility so your calls find you wherever you are. get some of our most advanced products at a great price with over $500 in savings. call today and ask how to get these savings plus a $250 prepaid card. comcast business. built for business. year-to-date health care and financials are the biggest drags on the s&p 500. right now take a look at the health care index, up about a percent while financials are up a little over 0.5%.
let's go hunting for value in these two areas. jim labenthal, value investor, i go to you first. >> we talked about this a couple days ago, melissa, but pfizer is top in my list. i think by the end of the year they'll make an announcement they'll split the company into an established products and innovative products company. i think that will unlock value to move the stock higher. now, listen, for both of these sectors, financials and health care, i'm not looking for outsized moves here. this is not something that's going to be up 50%. but you get a nice dividend yield in pfizer, 3.5%. get another 10% i think on the stock price appreciation. >> doc, looking to get back into intrex intrexon, we were just talking about zika in florida during the break. >> and just this past monday we sold out of it. spiked up all the way to 31, i think, mel. >> uh-huh. >> and now with the expanded zone that people are seeing for zika, kourtney can speak to that, this is something i think the stock, which has hit on the
mylan and some of the other things with health care this week made it a real buy beneath 26. >> yeah. you got a basket of names in health care that you find value in. >> yeah. so while not value, we ran a screen looking for stocks that are acting really well that have already broken out or are on the cusp of breaking out. and you actually don't find them, believe it or not, to be very prevalent in the drugs or in the biotechs. but you do find them in equipment and in services. so intuitive surgical, baxter, you can find companies that are health care related but are not acting like the drugs and not selling off every time hillary clinton gets the itch to tweet. these are companies that are really not related to those drug pricing pressures. and they look outstanding for the most part. >> right. we're talking about financials. and, kourtney, you've been sort of moving more into the cyclicals. so why now?
>> we're seeing that shift. i saw that shift on the desk when the flight to safety was going on. i talked about it. they are absolutely moving into financials and tech right now. and in the health care space we're seeing biogen, merck being bought. >> recently. this is post mylan. >> like this morning. >> okay. >> and, again, a lot of names were hit maybe that should not have been because of what was going on with mylan. but we're seeing state street, aig, boa, which is really interesting to see folks continuing to move. and they're moving into some of those bigger household names which is interest sging. >> and you like citi. >> i do. a kind of boring name, but if you're in it for the long term, you're not thinking 25 basis points from the fed is really going to change the net interest margin that much. what you're hoping for is if the fed gets back to a normal interest rate environment that
these stocks get valued in the way they traditionally have been which is on a price-to-book basis. if you look at citi it's about 7% of tangible book value. it should go back to tangible book value 1-to-1. >> we ran that same screen looking at financials looking for strength, looking for momentum in stocks that are doing well. and similar to what i just said about the drug companies, you don't find them in the big heavy xlf names. and actually forget about rate levels, we're talking at spreads. and spreads are collapsing. even the 530s. you cannot find an area that looks promising right now for how the banks are going to make money. however, when you look at the non-bank financials, you find charts that look outstanding. aflac is an example. look at s&p spgi, that's standard & poor's 500. and something for instance cme a company that benefits from rate volatility. it's where all treasuries are traded, future interest rates, et cetera.
these are non-banks within financials with great charts, not blase. >> all right. we have your final trades after this. >> follow us on twitter and tell us what you think. we want to hear from yo you @halftimereport. ll before markets close. you kn, your analysis haeds prove ouictive accuracbyve0%. 552, precisebut c c always br. i like your attitu watson. ♪ 552, precisebut c c always br. s are bu more and of evything oine. d many sinesses relon the unitedtes postalervice
get it ther d myour businesbecomes the uniteour business.vice at's why we make more ecmerce liveries to homes than anyone else ithe couny. the upriotyutas al svice. ♪ withhilevel of enginein.. it's a perfoancehine. ♪ wiwithhis degreeeefinllige. enginein.. it'it's a supercomputer. with t ts grof proteio.. it's a fortres
and wi this andardf lu.. inucing the complete redesied e-cla. it's everything you ne it to be... anmore. lease the3 your cal month rcedes-bendealer. thbest or nothing. the markets are closing in just about three hours time for the week, we want to get to final trades. pony boy. >> yeah, i love josh's outsider
reference, just haven't seen the movie. >> your new nickname. >> just went right by. mel, i saw some very strong buying in whiting petroleum, wll. so i added this one to the halftime portfolio today. and i think that some of that buying takes the stock through 10. that's my bet. that's one of the things i have to have happen to catch that guy over there. >> he's out front. >> plenty of time. >> josh brown, informed broker. >> well, i just want to make a general comment. i really don't think that anyone should be rearranging their portfolio based on a speech given from jackson hole. so if that's something that you're tempted to do today, or next week, you should really, really rethink it. it's very, very hard to get the curve right, the timing right and then figure out which stocks will benefit. that's a game best played by pros. and even they're not good at it. we'll talk about that another time. rethink that rearranging of your
portfolio based on anything janet yellen has to say. >> you know, there's been a lot of stealth stocks in the old sector bubbled up. we talked about cisco yesterday. here's another one, intel is knocking on the door of a two-year high, and nobody's been talking about it. it's been slowly bubbling up, good valuation, great balance sheet, good dividend yield and i think it's going to crescendo into the fall here. that's one i'm behind heavily. >> kourtney. >> one thing that's not being talked about right now, and obviously we're focused a lot on stocks, is the bond shift out of prime funds into government funds. the rules have changed. and obviously october 16th or 17th, i believe it is, all of these funds have to then now mark to market on the prime side for institutional nvinvestors. that's causing tremendous inflow into government funds. instead of fidelity and others explaining say, this is what could happen, breaking the buck, they're saying forget it move them into government funds. >> but the bills, t bills.
>> t bills and other government issued securities. the other thing is commercial paper, right, is held in a lot of these prime funds. companies ochbl issue commercial paper for short-term funding. the problem with that ends up being now they're going and issuing long term debt. pay attention to that. >> all right. great to have you on the desk today, kourtney. that does it for us here on "halftime report"." "power lunch" starts right now. i am bring -- brian sullivan. janet yellen, the hawk. a dodd/frank moment for pharma. could the epipen outrage be enough to get the government involved. if you're wondering why we're playing sticks, danger, will robins robinson, because robots are going to take over your salad. we'll explain. "power lunch" starts right now. you got to